As mentioned previously, if an asset goes directly to a joint owner or a beneficiary, outside of probate, that asset is a nonprobate asset and is not subject to the provisions of the decedent’s will.  This sometimes results in the final disposition of a decedent’s assets being very different than what he expected.

For example, Mrs. Smith is a widow with a will that states that she leaves her estate equally to her son and her daughter.  Her son and daughter may expect that they will each receive the same amount once their mother’s estate is probated.  Mrs. Smith owns a house worth $80,000, a car worth $10,000, a checking account containing $70,000, and a certificate of deposit worth $50,000.   Mrs. Smith named her son and daughter as equal beneficiaries on her CD.  Her daughter always helped her with her bills, so Mrs. Smith added her daughter as a joint owner to her checking account. 

Upon Mrs. Smith’s death, the house, and the car will be subject to the jurisdiction of the probate court, because those assets are titled in Mrs. Smith’s name alone.  If we assume the total of Mrs. Smith’s outstanding debts and medical bills, funeral expenses, and the costs of administering her estate to be $20,000, both her son and daughter will receive $35,000 ($80,000 (house) + $10,000 (car) = $90,000 (total gross estate) – $20,000 (costs/debts) = $70,000 ÷ 2 (# of beneficiaries) = $35,000). 

But the CD, because it has named beneficiaries, is a nonprobate asset.  It will pass directly to her son and daughter, with each receiving $25,000.  Because Mrs. Smith’s daughter is a joint owner on the checking account, it is also a nonprobate asset and will pass entirely to her daughter outside probate.   Mrs. Smith’s daughter will receive the entire amount in that account and will have no legal obligation to share any of it with her brother, even though Mrs. Smith’s will indicates her intention that they share equally.  So in the end, Mr. Smith’s son will receive $60,000, but Mrs. Smith’s daughter will receive $130,000.  Mrs. Smith’s daughter thus may be receiving a much larger share of the assets than her mother ever intended. 

As you can see, it is vitally important to take nonprobate assets into account when putting together an estate plan. Even with a will that clearly states your intentions, if you have nonprobate assets, the final distribution of your assets may be very different from what you intended, without careful planning.